However, gold bulls are tempering their outlook as a strengthening U.S. dollar will continue to curb demand for the metal, especially from overseas investors.
“The dollar will continue to trade strong since there is a divergence between the U.S. economy and other major economies in Asia and Europe,” Sameer Samana, a senior international strategist at Wells Fargo Advisors LLC, said in the article.
Gold ETF investors have already cut their exposure, with gold-backed ETFs experiencing a 38% drop in physical holdings since a record in December 2012. Physically backed gold ETFs now hold about 1,634.8 metric tons of gold, the least amount in five years, valued at $60.2 billion. [Despite Bullion Gains, Gold ETF Assets Drop]
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Full disclosure: Tom Lydon’s clients own shares of GLD.